Premier Investments Limited, accelerating online sales

Team Veye | 14 Jan 2021 ASX - PMV
Premier Investments Limited, accelerating online sales

Premier Investments Limited (ASX: PMV)

Premier Retail 1H21 Trading Update

Premier Retail on 13 January 2021 provided a 1H21 trading update based on results for the first 24 weeks of 1H21 ended Saturday 9 January 2021. Premier’s full 1H21 results will consist of 27 weeks ending Saturday 30 January 2021.

Premier now expected Premier Retail 1H21 EBIT for the 27-week period (pre-AASB 16) to be in the range of $221 million to $233 million, up between 75% and 85% on 1H20 (26 weeks ended 25 January 2020: $126.1 million)

(Chart source: TradingView)

This record 1H21 EBIT range result will be driven by:

  • Premier Retail’s Total Global sales for the 24 weeks to 9 January of $716.9 million, up 5.0% on the same period last year.
  • Premier Retail’s total global like-for-like (“LFL”) sales for the 24 weeks to 9 January up 18.0% with Australian LFL sales growth even stronger up 26.2% on the same period last year.
  • Premier Retail’s exceptional online sales growth and highly profitable online performance.
  • Exceptional total Gross Profit growth (both percentage and dollars), well ahead of last year for the same period.
  • Outstanding sales and gross margin growth in Peter Alexander, Just Jeans and Jay Jays in both Australia and New Zealand.
  • Strong cost controls including reaching agreements with key landlords on COVID-19 rent abatements.

(Graphic Source – Company Reports)

Premier Retail’s online sales have continued to accelerate. For the first 24 weeks of 1H21, online sales were $146.2 million which is up to $54.8 million or 60% up on the same period last year and contributed 20.4% of total Group sales (13.4% last year comparable period). Premier Retail’s online sales deliver a significantly higher EBIT margin than the EBIT margin of the retail store network. (Data Source – Company Reports)


Veye’s Take

Premier was eligible to receive “JobKeeper 1” during the wage subsidy scheme’s final months of August and September 2020 in Australia. The loss of gross profit in Victoria during government-enforced store closures for most of Q1 was more than offset by the wage subsidy support. Premier Retail delivered exceptional online sales growth and highly profitable online performance. Premier Investments Limited has and continues to maintain a strong balance sheet. The stock turned bullish on both long term as well as short term charts. Trading above its MAs, it has maintained its upside move from April 2020. On the price charts, the stock has managed to hold above the middle band of the Bollinger, taking the middle band support back to back, indicating a strong support zone area for the stock. It can have the potential to continue moving upwards. The Latest "Buy" on “Premier Investments Limited” at the price of $15.48 was given on 21 May 2020. It has already grown by more than 63% in less than eight months until now. Veye maintains a "Hold" on “Premier Investments Limited” at the current price of $25.35


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